Our work on demand forecasting considers the following illustrative construct.
Contemplate a situation wherein seasonal or fashion items are sold for a finite season. The “item” considered here can be a fine line, a style, or even a style color. The items typically are not replenished during the season, and are sold in kind across seasons.
One important demand forecasting objective, informed by this situation, is to generate a sales forecast “by item, by size, by location.” This sales forecast, in turn, can then be used advantageously to drive decisions on buying, allocation, markdowns and promotions.